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London open: Stocks edge up as investors mull jobs data
London stocks edged higher in early trade on Tuesday as data showed that UK wages grew faster than expected in the three months to April.
At 0835 BST, the FTSE 100 was up 0.2% at 8,243.90.
According to the Office for National Statistics, total pay including bonuses rose 5.9% in the three months to April, coming in above expectations of 5.7% growth. Meanwhile, growth for the previous three-month period was revised up to 5.9% from 5.7%.
Average regular earnings which exclude bonuses grew by 6% during the three months to April, unchanged from the previous three months and versus expectations of 6.1% growth.
Adjusted for consumer price inflation, total pay including bonuses grew 2.7% in February to April. This marked the fastest rate of growth since July to September 2021.
The data showed that the unemployment rate increased to 4.4% in the three months to April from 4.3% in the previous three months.
The ONS said: “This month’s figures continue to show signs that the labour market may be cooling, with the number of vacancies still falling and unemployment rising, though earnings growth remains relatively strong.”
Ruth Gregory, deputy chief UK economist at Capital Economics, said: “Overall, the stickiness of wage growth may not stop the Bank from cutting interest rates for the first time in August, as we are forecasting, as long as other indicators such as pay settlements data and next week’s CPI inflation release show decent progress.”
In equity markets, housebuilders were on the rise amid reports the Conservatives will introduce a new £1bn scheme to help first-time buyers and allow them to buy a home with just a 5% deposit. It was understood that this will be available for properties under £400,000.
Persimmon, Taylor Wimpey and Berkeley all gained.
Hikma Pharmaceuticals jumped to the top of the FTSE 100 as Citi lifted its price target on the stock to 2,845p from 2,770p.
GSK was also in the black after saying it had initiated an appeal against the Delaware Superior Court’s recent decision to allow plaintiff expert testimony in the Zantac litigation case, claiming the ruling was inconsistent with previous applications of the Daubert standard.
It said an application had been filed to seek interlocutory review by the Delaware Supreme Court, with Pfizer, Sanofi and Boehringer Ingelheim also involved.
Aircraft and defence engineering specialist Senior rose after saying it had won 10-year production contracts worth $80m from Collins Aerospace to supply thrust reverser structural components for Boeing 787, Airbus A320neo and Airbus A220 aircraft.
Oxford Instruments surged after its preliminary results and as it announced the acquisition of FemtoTools, a developer of nanoindentation instruments.
On the downside, heavily-weighted miners were the worst performers, with Rio Tinto, Glencore, Anglo American and Antofagasta all down.
Bus and train operator FirstGroup slid as it hiked its dividend by 45% after a substantial jump in annual profits, but said there were challenges ahead.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hikma Pharmaceuticals Plc | +3.32% | +64.00 | 1,994.00 |
| 2 |  |
Persimmon Plc | +1.94% | +28.00 | 1,474.00 |
| 3 |  |
Rightmove Plc | +1.84% | +10.20 | 564.00 |
| 4 |  |
Ocado Group Plc | +0.98% | +3.50 | 358.90 |
| 5 |  |
Auto Trader Group Plc | +0.85% | +7.00 | 830.60 |
| 6 |  |
Melrose Industries Plc | +0.84% | +5.20 | 624.60 |
| 7 |  |
Rentokil Initial Plc | +0.83% | +3.40 | 412.70 |
| 8 |  |
Barratt Developments Plc | +0.76% | +3.80 | 505.60 |
| 9 |  |
Tui Ag | +0.75% | +4.50 | 603.00 |
| 10 |  |
Croda International Plc | +0.73% | +31.00 | 4,263.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Glencore Plc | -2.97% | -14.15 | 461.65 |
| 2 |  |
Rio Tinto Plc | -2.63% | -141.00 | 5,216.00 |
| 3 |  |
Bhp Group Limited | -2.35% | -54.00 | 2,239.00 |
| 4 |  |
Antofagasta Plc | -2.32% | -50.00 | 2,109.00 |
| 5 |  |
Direct Line Insurance Group Plc | -2.22% | -4.60 | 202.40 |
| 6 |  |
Standard Chartered Plc | -2.15% | -16.20 | 737.00 |
| 7 |  |
St. James’s Place Plc | -1.46% | -7.50 | 506.00 |
| 8 |  |
Hsbc Holdings Plc | -1.43% | -9.90 | 683.70 |
| 9 |  |
Centrica Plc | -1.16% | -1.55 | 132.25 |
| 10 |  |
Admiral Group Plc | -1.13% | -30.00 | 2,627.00 |
US close: Stocks manage small gains on quiet Monday
Stocks on Wall Street showed modest gains on Monday, reflecting cautious optimism despite heightened political uncertainty following French President Emmanuel Macron’s announcement of snap parliamentary elections.
The unexpected move, seen by many as a high-stakes gamble, has potential implications for political stability on both sides of the Atlantic.
At the close, the Dow Jones Industrial Average was up 0.18% at 38,868.04.
The S&P 500 also saw a slight increase of 0.26% to end the day at 5,360.79, while the Nasdaq Composite outperformed the other indices with a gain of 0.35%, finishing at 17,192.53.
In currency markets, the dollar was last up 0.03% against sterling, reaching 78.57p.
Against the euro, it edged up by 0.01% to 92.9 euro cents, while it also strengthened against the Japanese yen, climbing 0.1% to JPY 157.20.
“Stocks find themselves hit by several worries today,” said IG chief market analyst Chris Beauchamp.
“The stellar payrolls report on Friday has dealt a further blow to hopes of a US rate cut, and snap French elections have given traders something else to worry about.
“Plus, with US CPI and the Fed on the calendar for Wednesday there is little incentive for traders to plunge back in.”
Beauchamp added that given the developments of recent days, it was “perhaps surprising” that stock markets had not suffered heavier losses.
“But a booming US economy is ultimately good for stocks, and the shock of French elections may turn out to be a buying opportunity if Macron’s gamble pays off.
“Investors should be prepared for the Fed to err on the side of hawkishness this week, but not excessively so, and the bar to further rate hikes is still very high.”
Market watchers look ahead on quiet day for data
Investors remained on edge as they awaited the Federal Reserve’s upcoming policy announcement, scheduled for two days from now.
The market’s focus was on whether the Fed will adjust its previous forecast of three interest rate cuts for the rest of 2024, a decision that could significantly impact economic sentiment and market dynamics.
Additionally, market participants were keenly anticipating the May consumer price index (CPI) report, expected to be released shortly.
Projections indicated a modest month-on-month increase of just 0.1%, marking the smallest rise so far this year.
The CPI data is crucial for understanding inflation trends and will likely influence the Fed’s policy decisions.
Apple falls despite AI announcement, Southwest surges
In equities, Apple dropped 1.9% following the announcement of its new AI platform, ‘Apple Intelligence’, at the Worldwide Developers Conference.
GameStop experienced a sharp decline, with its stock falling 12%.
That followed a dramatic 39% drop last Friday, marking the retailer’s worst day since February 2021.
The recent slump occurred despite Keith Gill, known as Roaring Kitty, reaffirming his positive stance on GameStop during a livestream on Friday.
Conversely, Southwest Airlines saw a significant boost, with shares rising 7% after Elliott Investment Management announced it had acquired a substantial stake in the airline, valued at $1.9bn, positioning Elliott as one of Southwest’s largest shareholders.
Nvidia also posted gains, with shares up 0.8% as they began trading after a 10-for-one stock split that took effect after trading closed on Friday.
Tuesday newspaper round-up: Asda, Apple, Elon Musk
One in three Asda staff have been attacked at work, according to research that included reports of workers being stabbed, punched and threatened with syringes. The poll of almost 1,000 members of GMB, one of the UK’s biggest unions, returned stories of delivery drivers being chased by people in cars, while store workers had food thrown at them. More than half (58%) of respondents said they had suffered injury or illness on the job. – Guardian
Tim Cook, the Apple CEO, announced a series of generative artificial intelligence products and services on Monday during his keynote speech at the company’s annual developer conference, WWDC, including “Apple Intelligence” and a deal with ChatGPT-maker OpenAI. The new tools mark a major shift toward AI for Apple, which has seen slowing global sales over the past year and integrated fewer AI features into its consumer-facing products than competitors. – Guardian
Elon Musk has said he could ban Apple devices from his companies over the tech giant’s deal to integrate ChatGPT into the iPhone, iPad and Mac. The Tesla boss said the decision was an “unacceptable security violation” and accused Apple of handing over user data to OpenAI, the firm behind the chatbot. – Telegraph
A higher share of pensioners are paying income tax than working people for the first time amid a surge in worklessness and Tory stealth raids, analysis has found. The Institute for Fiscal Studies (IFS) said 65pc of older Britons now pay tax on their income, up from just 48pc since 2010. It comes after the tax-free allowance for pensioners has been cut in real terms, while the state pension has risen by £3,700 to £11,502.40 since 2010 because of the triple lock. – Telegraph
Barclays is on the brink of renewing its long-standing link to the Premier League with a £75m deal which easily eclipses the value of its existing tie-up. Sky News has learnt that the British high street bank’s proposed four-year agreement with English football’s top flight was presented to its 20 clubs at a shareholder meeting last week. – Sky News
